Gray Media, Inc. · NYSE:GTN
Gray Media — Gray Television — Debt Investor Presentation (September 2014)
26 slides from Gray Media's debt investor presentation, Sep 8, 2014
Slide 1: Lender Presentation
Lender Presentation September 8, 2014 1
Slide 2: Introduction
Introduction Certain statements in this presentation constitute “forward-looking statements” within the meaning of and subject to the protections of the Private Securities Litigation Reform Act of 1995 and other federal and state securities laws. Such forward-looking statements involve known and unk
Slide 3: Transaction Summary
gray Television © Digital « Mobile Transaction Summary 2 wameond fe) ET “ATTI> Cater Mn 5 (72)CS) Sa EF D © Ba OS. 4.00 See
Slide 4: Transaction Overview
Transaction Overview On July 24, 2014, Gray TV (“Gray” or the “Company”) entered into definitive agreements to acquire WJRT-TV in Flint-Saginaw-Bay City, MI (ABC,DMA #68) and WTVG-TV in Toledo, OH (ABC/CW, DMA # 76) from SJL Holdings, LLC (“SJL”) for $128.0 million in cash, or approximately 7.0x 2
Slide 5: Acquisition Rationale
Acquisition Rationale The acquisition provides Gray with two additional market-leading televisions stations and expands the Company’s footprint in two mid-sized television markets – WJRT-TV in Flint-Saginaw-Bay City, MI (DMA #68) and WTVG-TV in Toledo, OH (DMA #76) According to BIA revenue data,
Slide 6: Company Overview
gray Television © Digital « Mobile Company Overview 2 wameond fe) ET “ATTI> Cater Mn 5 (72)CS) Sa EF D © Ba OS. 4.00 See
Slide 7: Combination Snapshot
Combination Snapshot Gray TV Standalone (1) SJL Pro Forma Post-SJL (4) ($ in Millions) Financial Profile (2) ’12A-’13A Revenue $474 $39 $515 (2) ’12A-’13A BCF $205 $15 $221 (2) ’12A-’13A OCF $195 $18 $213 Scale Stations 74 2 76 Non-Duplicated Markets 42 2 44 TV Household Reach 8.5 million (7.4%) 0.9
Slide 8: Gray Has a Diverse and National Footprint
Gray Has a Diverse and National Footprint 44 markets reaching approximately 8.1% of US TV households Great Falls, MT(1) Sioux Falls, SD Lincoln, NE Rockford, IL Lansing, MI South Bend, IN North Platte, NE Helena, MT(1) Rapid City, SD Fargo, ND (2) Wausau - Bismarck, ND Omaha, NE Toledo, OH(1) Rhinel
Slide 9: SJL Holdings Station Acquisitions Overview
SJL Holdings Station Acquisitions Overview WJRT-TV WTVG-TV Toledo, Flint-Saginaw-Bay OH City, MI DMA 76 DMA 68 Affiliation Market Revenue Rank Revenue Share Affiliation Market Revenue Rank Revenue Share 1 32.8% 2 31.1% Gray announced the acquisition of two ABC-affiliated WJRT-TV and WTVG-TV Combin
Slide 10: Investment Highlights
Investment Highlights A Leading Television Broadcaster in Diverse Mid Markets with Dominant Market Positions 141 program streams and 76 “Big 4” network affiliations #1 or #2 market rank in 40/44 markets; #1 news ranking in 29/44 markets Improving Advertising Market and Diversification of Rev
Slide 11: Diversification Across Networks and Markets
Diversification Across Networks and Markets Station Mix 2013PF Revenue: Top 10 Markets (1) 2013PF BCF: Top 10 Markets (1), (3) 141 Total Program Streams:(4) Lexington, KY 6% Charleston, WV Charleston, WV 6% 8% 76 Big 4 Affiliates:(4) Omaha, NE 4% Lexington, KY 6% 26 CBS Waco, TX 4% Monroe, LA 5%
Slide 12: Gray is A Leading Beneficiary of Political Revenue with Large Upside
Gray is A Leading Beneficiary of Political Revenue with Large Upside Gray TV Political Commentary 2012 Political Revenue as % of Total (1), (2) $86 Million in 2012 – New Record 21.2% 21.2% 2011 - Off Year Record $13.5 million Gray operates in key battleground states 15.1% 13.8% #1 stations c
Slide 13: Strong Growth in Retransmission Revenue
Strong Growth in Retransmission Revenue Approximately 9.5 million Big-4 Gray TV Retransmission Revenue (1) Affiliate subscribers(2) ($ in millions) $60.4 Approximately 5.0 million Big-4 $13.8 Affiliate subscribers(2) re-pricing $39.8 12/31/14 $33.8 $7.6 $5.6 Approximately 0.9 million Big-4 $15
Slide 14: Financial Overview
gray Television © Digital « Mobile Financial Overview 2 wameond fe) ET “ATTI> Cater Mn 5 (72)CS) Sa EF D © Ba OS. 4.00 See
Slide 15: Gray Historical Financial Summary
Gray Historical Financial Summary Net Revenue (1) LTM Revenue L8QA Revenue $523 $503 $405 $356 $376 $346 $327 $346 $308 $307 2010 2011 2012 2013 6/30/14 PF ) L8QA Growth 3% 6% 9% 5% -- LTM 2-Yr. Growth 6% 14% 17% 13% -- Operating Cash Flow (1) Capital Expenditures (1) ($ in millions) ($ in millions)
Slide 16: Prudent Balance Sheet Management Leads to Deleveraging
Prudent Balance Sheet Management Leads to Deleveraging Gray has significantly reduced secured and total leverage from historical levels Gray’s strategic investments have diversified its revenue base, allowing for significant free cash flow in both political and non-political years Net Financial
Slide 17: Sources & Uses and Pro Forma Capitalization
Sources & Uses and Pro Forma Capitalization Sources & Uses ($ in Millions) Sources Uses Incremental Term Loan B $75.0 Acquisition of Select SJL Holdings Assets $128.0 Cash from Balance Sheet 57.8 SJL Working Capital Adjustment 3.8 Estimated Fees, Expenses and OID 1.0 Total Sources $132.8 Total Uses
Slide 18: Appendix
gray Television © Digital « Mobile Kaneiand &j wel Py ‘\ A] Appendix A AT a Me PPE Ss EFI oOo ee OO cyeuen
Slide 19: Glossary
Glossary “Acquisitions”: The Hoak Acquisition and Gray’s other previously completed acquisitions of Rapid Cities, Prime Cities, Lockwood, Yellowstone and KJCT; excludes Montana and SJL unless otherwise specified “Excalibur” (Excalibur Broadcasting, A television broadcaster with two stations (KJCT, K
Slide 20: Q2'14 L8QA and LTM Financial Summary
Q2’14 L8QA and LTM Financial Summary 6 Months Ended ($ in millions) 2012 2013 6/30/2012 6/30/2013 6/30/2014 LTM 6/30/13 LTM 6/30/14 L8QA 6/30/14 Net Revenues Local 191.3 203.1 94.3 97.3 107.7 194.3 213.5 203.9 National 56.8 58.3 27.3 28.5 28.2 57.9 58.0 58.0 Political 86.0 4.6 18.1 1.4 11.4 69.3 14.
Slide 21: Pro Forma Non-GAAP Reconciliation
Pro Forma Non-GAAP Reconciliation ($ in thousands) Year Ended December 31, Six Months Ended June 30, LTM L8QA 2012 2013 2012 2013 2014 6/30/13 6/30/2014 6/30/2014 Net income $ 59,350 $ 29,243 $ 24,000 $ 9,036 $ 20,764 $ 44,385 $ 40,972 $ 42,678 Adjustments to reconcile from net income to Broadcast C
Slide 22: Pro Forma Non-GAAP Reconciliation (continued)
Pro Forma Non-GAAP Reconciliation (continued) Pro Forma Twelve Months Ended December 31, 2013 Gray SJL Other Pro forma Gray Actual Actual Acquisitions Adjustments Pro forma Net income $ 18,288 $ 2,944 $ 25,031 $ (17,020) $ 29,243 Adjustments to reconcile from net income to Broadcast Cash Flow Less C
Slide 23: Pro Forma Non-GAAP Reconciliation (continued)
Pro Forma Non-GAAP Reconciliation (continued) Pro Forma Twelve Months Ended December 31, 2012 Gray SJL Other Pro forma Gray Actual Actual Acquisitions Adjustments Pro forma Net income $ 28,129 $ 10,532 $ 32,199 $ (11,510) $ 59,350 Adjustments to reconcile from net income to Broadcast Cash Flow Less
Slide 24: Pro Forma Non-GAAP Reconciliation (continued)
Pro Forma Non-GAAP Reconciliation (continued) Pro Forma Six Months Ended June 30, 2014 Gray SJL Other Pro forma Gray Actual Actual Acquisitions Adjustments Pro forma Net income $ 2,868 $ 2,601 $ 44,401 $ (29,106) $ 20,764 Adjustments to reconcile from net income to Broadcast Cash Flow Less Cash Corp
Slide 25: Pro Forma Non-GAAP Reconciliation (continued)
Pro Forma Non-GAAP Reconciliation (continued) Pro Forma Six Months Ended June 30, 2013 Gray SJL Other Pro forma Gray Actual Actual Acquisitions Adjustments Pro forma Net income $ 6,014 $ 1,507 $ 11,207 $ (9,693) $ 9,036 Adjustments to reconcile from net income to Broadcast Cash Flow Less Cash Corpor
Slide 26: Pro Forma Non-GAAP Reconciliation (continued)
Pro Forma Non-GAAP Reconciliation (continued) Pro Forma Six Months Ended June 30, 2012 Gray SJL Other Pro forma Gray Actual Actual Acquisitions Adjustments Pro forma Net income $ 14,365 $ 3,957 $ 11,321 $ (5,643) $ 24,000 Adjustments to reconcile from net income to Broadcast Cash Flow Less Cash Corp
Gray Television — Debt Investor Presentation (September 2014) on 6ix